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Guides, Residential Aged Care

November 13, 2023

Understanding Residential Aged Care Fees & Costs

Moving into residential aged care is a big decision, and getting a handle on the associated costs is crucial. The Australian Government provides support, but there are still some fees you might need to cover depending on your personal circumstances and the type of care you choose. To make this easier, we've broken down the various fees associated with residential aged care.

What are the main costs?

1. Basic Daily Care Fee

This fee covers your daily living expenses in the aged care home, such as meals, utilities (electricity), and other essentials like laundry, cleaning and personal care. It’s a standard fee set by the government and is calculated based on your income.

What you should know: The Basic Daily Care Fee is set at 85% of the single Age Pension, determined by the government, and every resident in an aged care home contributes to this fee. This ensures basic services are accessible to everyone regardless of their financial situation.


2. Means-Tested Care Fee

If your income and assets exceed a certain threshold, you may be required to pay a Means-Tested Care fee. It’s calculated based on an assessment of your financial situation, and helps cover the cost of your care. The fee amount is determined by considering your assets and income.

What you should know: It varies from person to person, as it is assessed by Services Australia based on your financial situation. Any changes in your assets, income, or the cost of care can influence the amount you’re charged. The good news is there are annual and lifetime caps in place to ensure you won’t pay more than you should over time.


3. Accommodation fees

These costs are related to your room and the choice you make regarding accommodation, and is only payable if your income and assets exceed a certain threshold.

What you should know: You can choose to pay these costs as a lump sum (a Refundable Accommodation Deposit), periodic payments (a Daily Accommodation Payment), or a combination of both.

  • Refundable Accommodation Deposit (RAD): A one-time lump sum payment that is fully refundable once you leave the care home.
  • Daily Accommodation Payment (DAP): Regular payments, calculated based on the maximum permissible interest rate (MPIR). This isn’t refundable.
  • Combination payment: A mix of both RAD and DAP. Only the RAD component is refundable upon leaving.
  • The fees may differ depending on the care home and type of room.


4. Additional services

These are the services above and beyond the standard care offerings and might include special recreational activities, outings, added entertainment options and more.

What you should know:

  • These are tailored to enhance the care experience.
  • They can vary depending on the location and offerings.
  • All fees for additional services should be clearly communicated in writing.


If you would like to know how much you might have to pay towards your Home Care Package or aged care home, this fee estimator can give you an estimate – to help you plan: https://www.myagedcare.gov.au/how-much-will-i-pay

Transitioning to residential aged care is a significant step. Being informed about the costs involved ensures you’re well-prepared and can make the right choices for yourself or your loved ones. At Warrigal, we’re committed to providing clarity on all fees and ensuring your journey into aged care is as smooth as possible. If you have any questions or need further assistance, please don’t hesitate to reach out.

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